Centennial, Colo., Jun. 19 - Penford Corporation, announced today that its principal subsidiary, Penford Products Co., is making significant progress in the restoration of its Cedar Rapids, IA plant.
The plant was shut down on June 12, 2008 due to record flooding of the Cedar River and government-ordered mandatory evacuation of the plant and surrounding areas. The impact has been widespread and the entire community is collaborating to recover in and around Cedar Rapids.
Penford Products sales and technical service personnel are working intensively to assist customers in meeting their requirements. The plant was entered and surveyed early this week. Outside resources have been engaged and are now working on-site with Penford employees in the evaluation and clean-up phase of the recovery. The Company plans to begin re-occupying sections of its Research and Development and Administrative buildings this week.
It is still too early to estimate total damage costs or when the plant will become fully operational. However, the Company presently anticipates that the facility will not be in position to manufacture significant product volumes prior to the end of this August.
Penford has in place National Flood Insurance Program and other insurance policies with highly rated insurance companies. This coverage includes property damage and business interruption protection. Subject to the terms of the policies and the applicable deductibles, Penford estimates that its aggregate policy limits are approximately $30 to $35 million. The insurers have been notified and loss adjusters have started visiting the plant. Penford is unable to provide assurance at this time as to the amount or timing of the ultimate recoveries under its insurance policies.
The Company’s potato starch manufacturing operations supporting its North American Food Ingredients business were not affected by the Cedar Rapids flood and all continue to produce at planned levels.
“We have an experienced team of exceptional employees who are responding to this event,” said Tom Malkoski, Penford Corporation President and Chief Executive Officer. “Detailed recovery plans are in place and are being energetically implemented. In addition to its insurance policies, the Company believes that it has sufficient available capacity under its existing credit facilities to fund expenditures required to restore the plant to optimal operating conditions. We are committed to a complete recovery of the business and to resume supplying our customers as quickly as possible.”